TrueCar hits reset, drops practices that riled dealers

Chip PerryTrueCar CEO"We believe at a core level, even though a new car is somewhat of a commodity, a deal is not a commodity." NoneThe Perry eraHere are some changes coming at TrueCar. Website Eliminating competing dealerships' prices to reduce race-to-the-bottom pricing Showing prices only after lead submission on specific vehicle identification numbers Listing prices without showing dealer cash incentives to customers Listing local, not regional, prices Giving dealerships more branding opportunities Dealer relations Expanding subscription billing model nationwide Using a third party to monitor TrueCar's promise not to use dealership management system data without permission Portraying dealers favorably in advertising and on website To see the “Our Pledge to Dealers” letter from TrueCar's Chip Perry, go to autonews.com/truecarletter New TrueCar Inc. CEO Chip Perry is radically overhauling the car-shopping site, dismantling many of the practices that have most alienated dealers. In a letter sent to dealers Sunday titled "Our Pledge to Dealers," Perry identified changes designed to address several areas of dealer concern: Product offerings: Among several significant changes, shoppers visiting TrueCar's website now will see prices for a specific vehicle only after they have submitted their names and contact information as leads to TrueCar certified dealers. TrueCar is eliminating the page that formerly listed competing dealerships' prices. Dealer relations: TrueCar's subscription billing model, currently offered only in select states where required by law, will roll out nationally by year end as an option for dealers.Data security: TrueCar will purge certain consumer information from its databases and use an outside monitor to ensure that it doesn't gain unauthorized access to dealership information.Marketing messages: TrueCar's advertising and website, which formerly were accused of denigrating dealers, will seek to portray dealers favorably. "We're making serious changes to reduce sand in their gears," Perry told Automotive News. While the changes represent a sharp redirection of the company, Perry called them "a reset of the value proposition, not a fundamental remake of the business model," which he said was sound but poorly executed. In the past, he admits, TrueCar lost its balance, tilting toward being a consumer advocate against dealers. "There was kind of a callousness toward the dealer," he said. Now, he said, senior management is committed to a new approach: "See the dealers as our true customers," but in a way that "doesn't harm our consumer experience in any way." The changes follow what Perry called a "listening tour," during which he met with dozens of dealers and heard "brutally honest" opinions of what TrueCar did wrong. "They didn't hold back," he said. "One owner of a major group told me the least favorite time of his month was signing the TrueCar bill," Perry said. Among the changes outlined by Perry -- the former head of Autotrader who took over as TrueCar CEO on Dec. 15 following the abrupt departure of Scott Painter in August -- the pricing change is the most significant. Previously, consumers could use TrueCar's list of competing prices to open deal negotiations. That, many dealers felt, promoted a race to the bottom in pricing. There's "no need for a digital marketplace to have that kind of impact," Perry said. "TrueCar needs to be a positive force for the entire industry."

TrueCar hits reset, drops practices that riled dealers

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